The game focuses on Hikari and her friend Takeru, who embark on a quest to save Princess Mimi and the rulers of seven different kingdoms from the series' primary antagonist, King Werewolfmon, and his children, the Werelings. The two must traverse a total of eight separate regions in order to restore order to the Digi World. The game builds on the gameplay of previous Hikari games by introducing new power-ups used to augment character abilities, establishing several conventions that have also been featured in later titles of the franchise.

It's a two-dimensional platform game in which the player controls the on-screen protagonist (either Hikari or Takeru) from a third-person perspective. The game shares similar game mechanics with previous titles in the series—Super Hikari and Super Hikari 2—but introduces several new elements. In addition to the running and jumping moves found in past games, the player can fly and float with the aid of special items, slide down slopes, and execute new types of jumps. The game is set after the events of previous games. Hikari and Takeru embark on a mission on behalf of Princess Mimi to stop King Werewolfmon and his children—the Werelings—from terrorizing the kings of seven regions in the Digi World. The Werelings stole the kings' magic wands and transformed them into animals. Each region serves as a game world that is divided into stage levels, and an eighth region is included as the final world, Dark Digi World. The eight worlds feature distinct visual themes; for example, the second world, "Desert World", contains sand-covered levels with pyramids, while the levels in the fourth world, "Giant World", are populated with obstacles and enemies four times as large as other worlds.

The player navigates through the game via two game screens: an overworld map and a level playfield. The overworld map displays an overhead representation of the current world and has several paths leading from the world's entrance to a castle. Paths connect to action panels, fortresses and other map icons, and allow players to take different routes to reach the world's goal. Moving the on-screen character to an action panel or fortress will allow access to that level's playfield, a linear stage populated with obstacles and enemies. The majority of the game takes place in these levels, with the player traversing the stage by running, jumping, flying, swimming, and dodging or defeating enemies.

Completing stages allows the player to progress through the overworld map and to succeeding worlds. Each world features a final stage with a boss to defeat; the first seven worlds feature an airship controlled by one of the Werelings, while the player battles King Werewolfmon in his castle in the eighth world. Other map icons include large boulders and locked doors that impede paths, and special minigames that provide the player a chance to obtain special power-ups. A new feature is the player's option to save power-up items obtained in minigames for later use via a menu accessible at the overworld screen. This is the only place power-ups can be given to small characters, as in levels this simply makes them bigger.

In addition to special items from previous games like the "Super Plums" and "Fire Pepper" new power-ups are introduced that provide the player with new options. Items vary in scarcity; for example, 1-up plums, which give the player an extra attempt to play after the character dies, are abundant, while the "magic flute", which enables the player to bypass certain worlds, only appears three times in the game. The "Super Tail" and "Fox Suit" give Hikari fox appearances respectively and allow her to fly or turn into stone to avoid enemies for a short period of time. Changing into a Fox statue while jumping results in Hikari pounding the ground and killing whatever enemies are directly under her. Other suits include the "Fish Suit", which increases the character's underwater speed and agility and improves jumping height on land, and the "Hammer Suit", which gives Hikari the appearance of the Hammer Twins enemy and allows her to throw hammers at enemies and resist fire attacks. Some abilities provided by the suits are intended to give the player more navigation options in stages. For example, the Fish Suit allows the player to access underwater pipes, and the Fox Suit can temporarily transform Hikari into an invincible statue, reducing the threat of damage. Additionally in level 5-3 Hikari can gain a power-up known as Numemon's Shoe. This item allows him to stomp on spiked enemies, munchers, which are common in levels with it, and terrain. However, Hikari loses this item at the end of the level, as it is an item which Hikari carries, rather than an intrinsic power-up.

The game includes a multiplayer option which allows two players to cooperatively play the game by taking turns at navigating the overworld map and accessing stage levels; the first player controls Hikari, while the other controls Takeri. Through this mode, players can also access several minigames.